N.Z. POLICY

Evening Post, Volume CXXVIII, Issue 12, 14 July 1939, Page 10

N.Z. POLICY

INDUSTRIALISATION

SAYINGS IN ENGLAND

(By Air Mail, from "The Post's" London Representative.)

LONDON, June 15.

"Recent reports of industrial developments in New Zealand have not diminished the uneasiness of exporters and City people over here," says •the "Manchester Guardian" in its financial notes. "Nor has it become any easier for Mr. Nash, the Finance Minister, to arrange during his present visit for both the conversion of the £17,000,000 Zh per cent, bonds maturing at the end of this year, and the extra loan he will seek to finance schemes of defence and, it is said, other internal purposes.

"At first glance the argument that an increase in New Zealand's sterling assets would diminish or remove the need for import restrictions has some attraction. But the people who will have to provide the money will wish to be sure that it is not used simply 'to increaco the imports of industrial equipment for. the setting up of plant to compete with imported manufactures. "Less hopefully they would urge that the New Zealand Government should not use the extra sterling as a basis for further expansion of internal credit, which would probably have the same effect of stimulating imports of plant, and leau before long to a fresh shortage of London funds. The figures of New Zealand's foreign trade in the past fe-." years suggest such doubts. NEW ZEALAND BALANCE OF TRADE. (£XZ MILLIONS). iftoS. 1937. W3U. Ui3">. Exports .. 53.4 liG.7 5H.7 1(5.5 Imports .. 55.4 5(5.2 44.15 3(5.3 . Balance .. 3.0 10.U 12.5 10.2 "When the proceeds of exports increased, imports were allowed to increase even more rapidly until in 1937 the balance was not sufficient to meet the service of the external debt and the cost of shipping and other services.. reckoned to require together . about £NZ12,000,000 a year. In 1938, when exports were sold at lower prices and brought in smaller proceeds, imports 'were hardly reduced. "As the sterling assets were at the same time being drawn upon by a flight of capital, a severe restriction of imports became imperative. Few people will dispute the need for such a measure, though many have criticised the internal policy which encouraged large imports in th.2 first place. The chief objections are raised against the manner in which the Government met the need last December, and even more with the manner in which the control of foreign trade and foreign exchange has since been handled. ESTABLISHMENT OF INDUSTRIES. "The letter from the president of the New Zealand Bureau of Importers (Mr. W. O. Bartlett, of Auckland), draws atten'./Jn to some of these points. Import restrictions, the writer states, were introduced in several instances at a time when the sterling assets were still ample. He asserts what is, in fact, well known, that the New Zealand Government has for some tune encouraged the development of home industries as a matter of policy. Some of the complete prohibitions contained in the recent list for the second half of this year, like that of wireless sets, can hardly have another purpose. "It is now reported that since the import control was set up a number of, factories have been established or expanded to produce goods now shut out. If these events are arousing resentment among manufacturers in this country, it should be remembered that the present Government did overcome by means of its economic policy the severe crisis into which the Dominion had fallen through the instability of its export markets. Whether the policy will succeed in the long run is : n other matter. Controlled trade appears to carry its own obstacles, and, like some of the totalitarian States, New Zealand is meeting retaliation from the buyers of its produce."